Anyone working outside of the insurance industry may not necessarily think of crafting specialized coverages for nonprofit clients as art. But that’s how Michael Pramuk, who has worked at Nonprofits Insurance Alliance for 25 years, sees his role as a Senior Underwriter in the Large Business Unit. At the heart of underwriting nonprofits, Michael tells us, is an internal drive to truly understand the substantial difference nonprofits are making—and to adapt to evolving needs in order to insure those services.

In your experience, what stands out as the main difference in the way NIA approaches writing business compared to other insurers?

I used to work at an insurance company that could decline any account for unusual risks. Here at NIA, it’s just the opposite. If you want to push to write an account, you can probably do it. But if you want to decline a nonprofit, that declination has to go to a senior manager. If it’s a nonrenewal, that account goes to the CEO. We want to make sure that we’re insuring as many nonprofits as we can and that we’re being consistent. That’s a major shift from the skepticism and conservatism of other insurers.

NIA doesn’t cover a few types of organizations, such as medical centers or organizations that hold individuals against their will. Is this because other insurers are available for these organizations? Are the risks too catastrophic and could result in lawsuits? Or is it a question of values?

We don’t insure nonprofit hospitals and clinics with a material medical practice because we don’t offer medical malpractice insurance. If a nonprofit has a couple of doctors or nurse practitioners, we can write them as long as the medical professionals have their own insurance for medical malpractice.

For organizations that hold people against their will—we don’t necessarily deny them just because the risks are too catastrophic. Yes, lockdown facilities can result in lawsuits since people are being held against their will. But there are also new organizations that have cropped up in the past ten years, like reform schools or boot camps for teenage boys, where we’ve seen really bad practices such as takedown and restraint techniques. They can be abusive and brutal and result in people saying they were kidnapped held against their will or even maimed or killed.

That’s a major shift from the skepticism and conservatism of other insurers.

Also, we specifically insure nonprofits whose goal is to free people held against their will, such as eliminating sex trafficking. A lot of our members help people who are either abused at work or taken advantage of economically, like being paid super low wages, and rescued from situations that are not considered humanitarian.

Can you give us an example of a nonprofit that would not have been covered by any other insurer but that we decided to cover—and it ended up being a fantastic decision for everyone involved?

Absolutely! There are lots of nonprofits like that. I had one the other day that kind of touched me. They’re just starting off in Illinois, and they’re funding and managing electrocardiogram tests for high school kids playing sports. In the last ten years we’ve all read in the news that kids are collapsing during football practice due to preexisting heart conditions that were never found. A lot of insurance companies wouldn’t touch that and would say, “We don’t want anything to do with a test that’s incorrect on a kid with a heart condition.” We also insure organizations that conduct AIDs testing or pass out needles.

And our general liability loss ratio is excellent. So, if you look at the types of accounts we write, there’ve been so many that other insurance carriers would not cover, or they would charge a lot of money or exclude what the nonprofit needed covered.

A lot of our members help people who are either abused at work or taken advantage of economically, like being paid super low wages, and rescued from situations that are not considered humanitarian.

When NIA produces an innovative product, how long does it usually take for the rest of the insurance industry to catch up?

Usually a year or so. Larger, for-profit insurers, even though they’re much bigger, are always trying to compete with us and replicate a lot of our coverages. But when we see a need in the sector, our company is faster to adapt because we’re smaller, more streamlined, and more flexible. For example, we added coverage so that schools impacted by new laws allowing teachers carry-ons would still have some insurance—and not face complete bankruptcy if someone were injured. Those schools would have otherwise been excluded from our coverage because of that unfortunate arms exposure in those states. We never want to see a nonprofit that doesn’t have the coverage it needs to operate. We want to see nonprofits survive, and we’re faster at getting the appropriate coverages in place.

I would say there are some coverages or some ways we do things that no other company does. For example, full liquor liability coverage is part of our general liability insurance for no additional premium charge. That’s very useful for nonprofits when hosting fundraising events. Sometimes a nonprofit needs the coverage immediately for an event they’re hosting the next day, and it would be difficult to add a whole new policy in such a short period of time. So we started to just include it so that our members are covered.

When NIA was first founded, there wasn’t much data to show nonprofits were a good risk. There wasn’t much data to show that they were a poor risk either. NIA’s decisions created that data. How did you handle that? How did you decide, “There’s not enough data, so I’m going to take this risk,” or “There’s not enough data, so I’m not going to take this risk?”

We took a positive approach to underwriting nonprofits. In the beginning, we didn’t have a 250-page underwriting manual we’d created to reference. A lot of it was trust in the nonprofits.

Our CEO challenged the inclination of for-profit insurance companies to think that writing nonprofits was bad underwriting and that these nonprofits were a gigantic risk. We looked at the history of each nonprofit, but a lot of it is intuition. We ultimately couldn’t know if this class of business was going to be good risk or not, but we wanted to trust the nonprofit sector to manage itself well. Luckily, time proved us right. There’s definitely an art to underwriting nonprofit risks. It’s the intersection of art and business, because nonprofits are doing so many different things that you have to be creative in how you cover them and what accounts to accept.

In the beginning, we didn’t have a 250-page underwriting manual we’d created to reference. A lot of it was trust in the nonprofits.

And then of course there’s a business side. The organization needs a surplus to keep writing more accounts and to be able to return dividends to nonprofits. But the interesting part of the job is looking at these nonprofits that do amazing things and just thinking, “Wow, I bet other insurers would shy away from this, but we’re going to find a way to do this.”

How much of it is intuition?

Probably about 50%.

And that makes us a lot like our members, because they have a lot of faith in the work that they do, and we have faith in them.

Exactly. And I mean, their operations are also very fluid. A lot of the organizations are changing depending on what’s going on in society, and their programs grow as they add services based on the ongoing needs of the community. For example, there are nonprofits that provide consultations for people trying to get health insurance after the Affordable Care Act was passed. Nonprofits are really flexible when things change in society.

NIA does the same thing. As a nonprofit ourselves, we’re quick to adapt. We are constantly changing—every week it seems there’s a new nuance to add to our underwriting manual as we become more thorough and detail-orientated and as we understand our members. It’s nice to see that our company moves along with the nonprofit community and works with members instead of against them. We take stock in the changes going on and adapt to them too.

It’s been great working here all these years, and it’s never dull because of all the changes. The favorite part of my job is looking at nonprofits’ websites and seeing all the great things that nonprofits do. It’s heartwarming to see services that help underprivileged people or disabled people or really anyone who just needs help that the government doesn’t help enough. That’s my editorial opinion. But I think nonprofits fill a lot of the void that government services don’t provide anymore. And NIA will continue to do everything we can to make sure these services continue.

Michael Pramuk was born in Plainfield, NJ and raised in the neighboring borough of Fanwood, NJ. He attended Boston College, earning a B.A. in Liberal Arts, and played varsity baseball (pitcher) at Boston College, and then in Holland. His underwriting career spans from 4 years at a for-profit property and casualty company where he was a casualty underwriter, to NIA where he has been for 26 years underwriting property and casualty coverages for nonprofit organizations.

Michael is married with two children (aged 17 and 20, juniors in high school and college) and resides in Santa Cruz with a dog and two cats (all rescued from a local SPCA).

Nonprofits need a supportive and knowledgeable insurer that understands the complex funding streams that comprise 501(c)(3) budgets. If you’ve ever called the Finance department at NIA, you might have spoken to Stephanie Larsen, who has worked with NIA for 19 years and recognizes the challenges nonprofits face in managing their budgets.

Now as the Accounts Receivable Team Lead, Stephanie describes her journey to helping nonprofits keep their insurance current.

How did you find yourself working at NIA?

Before NIA, I was working at an independent insurance brokerage for a few years, where I obtained my insurance brokers license. I was young and relatively new to the workforce, and I learned a lot about interacting with customers. That independent brokerage sold pretty much everything from commercial, to property, to health insurance—actually, I think nonprofit insurance was the only type they didn’t sell!

But we were also pushing products that didn’t need to be sold. We sometimes were hounding clients to purchase coverages that they already had or that didn’t interest them. That practice didn’t sit well with me, which was one of the many reasons I didn’t want to continue with the agency.

So when I was recruited to NIA, I could immediately see that it was a drastically different place. As a 501(c)(3), NIA operates with a completely different mindset. Most insurance companies charge for every little interaction and every little endorsement. We don’t do that.

What does your typical day in the Finance department look like?

I’m the ‘fixer’ in some senses. My team is primarily responsible for billing our members and brokers for premiums. Some of the nonprofits we insure are small or volunteer-run and need extra attention. I help give direction in extenuating circumstances, where maybe we need to extend the due date or accept a smaller portion because the member is waiting for funding.

I also oversee the policies and procedures that relate to accounts receivable. Recently, we introduced autopay, after several members and brokers requested it. With the implementation of autopay, there’ve been a slew of new processes and procedures that I manage in order to make sure operations are running smoothly and practically.

As a 501(c)(3), NIA operates with a completely different mindset. Most insurance companies charge for every little interaction and every little endorsement. We don’t do that.

How do you communicate with members to discover and meet their needs?

Often the communication is a result of a missed payment. We’re unique compared to a typical company—not just to an insurance company, but to any company—because we do really try to go out of our way to make sure it’s convenient for members to keep their insurance coverage paid. So, if a member misses a payment, in most cases, we’re reaching out to help them work around obstacles rather than penalizing them. Our smaller members can be short-staffed, so keeping track of payment due dates can be hard to manage for them. Autopay has been a great option because then the nonprofit doesn’t have to worry about remembering the payment.

Autopay was a change brought about by NIA members. Would you say that NIA’s members have a lot of impact on how NIA operates, even in the Finance department?

Yes, we take comments from members into consideration. For example, we lowered the finance rate to a nominal 3% based on feedback from members and our ability to absorb the change. We want members to feel like they’re getting value in our services and that we’re not overcharging them.

Currently, I’m making some changes on the member statements based on feedback from a member who found some of the information on the statement confusing and difficult to locate. I felt she had some great points, and I will be using her feedback to improve the language on the statements.

What is NIA’s approach to working with members through billing challenges?

The key is to get to the root of the problem and find a solution that works for everyone. A lot of times, if you try to speak with a smile in your voice, it really changes the direction of how the interaction is going to go!

I would also say patience. It’s easy to feel frustrated with somebody and to think, “They’re angry with me,” when really, that’s not the case. It’s important to recognize that maybe the member is stressed because of overwhelming challenges in the organization, and they really need their insurance, but it’s just one more thing they have to take care of.

Listening, recognizing that there’s a problem, and letting members know we will do our best to find a solution goes a long way. It reinforces that we have the nonprofit’s best interest at heart.

Working in the Finance department, do you have any memorable experiences with members?

I’ve always appreciated the latitude that our AR Accountants have, individually, to work with members. Our CFO and Controller are very supportive. We have the freedom to look at an account and come up with a viable payment arrangement to accommodate the member’s circumstance, whether the solution is extending a due date, accepting a partial payment, or—in some cases—both, to make sure our members stay properly insured.

Allowing our employees to have this autonomy to work with the members has always been rewarding and helps to contribute to our unusually low collection balance. It’s a testament to us that we’re able to work just as well with members struggling with payments as members who are on top of it.

The key is to get to the root of the problem and find a solution that works for everyone. A lot of times, if you try to speak with a smile in your voice, it really changes the direction of how the interaction is going to go!

I once spoke to a really small organization—an animal rescue run by two people. The member was super frantic because she didn’t have the funds to pay the insurance, but she knew that she needed the insurance. Over the phone, I could literally hear puppies in the background! And she said, “I’m really sorry. I don’t know what to do. I have to be honest with you: It’s either food for the animals, or it’s the insurance… and I have to feed the animals.” Obviously, that tugged some heartstrings, particularly with puppies barking in the background.

For me to able to say, “You know what? When are you expecting the next round of funding to come in?” and to be able to work with her and formulate a plan allowing the nonprofit to continue taking care of the animals and keep their insurance active was extremely rewarding. It’s another example of how NIA’s dedication to the nonprofit sector extends to our Finance department.

Has your volunteer work shed light on NIA members’ experiences?

I started a Girl Scout troop two years ago! When I was a Girl Scout myself, it was a fun way to get into community service and learn new skills. And I have a daughter, so I looked for a troop, and… they didn’t have any to join. So, I started one!

We’ve done food drives for our local food bank and donated money to a small animal shelter. When we donated to the food bank, we took a tour of the facility, and the Girl Scouts developed a better understanding of where their food donations were going and why it’s important to help their community. It’s been fun to empower little girls to be leaders and know they have agency to create change!

For me to able to say, “You know what? When are you expecting the next round of funding to come in?” and to be able to work with her and formulate a plan allowing the nonprofit to continue taking care of the animals and keep their insurance active was extremely rewarding.

That initiative shed light on what it’s like to start a nonprofit: You try to gather a group of people and empower them to come up with ideas for bettering the community. I can also see the challenges. I have 12 girls in the troop, and sometimes they all have different views, which compels me to bring ideas together in a cohesive, productive way.

I would imagine some nonprofits experience similar challenges and rewards, which gives me perspective. I know I’m teaching these girls to make a positive impact on their community and world as they grow. That experience is very influential on the way I see our members.

Stephanie Larsen is a Santa Cruz local and has been with NIA for 19 years helping streamline the billing processes and procedures. She also works with IT to help enhance the billing system, billing experience on the portal, and member payment options. Stephanie enjoys the beach and spending time with her family, friends, and fluffy black cat.

For 30 years we’ve been a unique voice, and that includes the design of our communications materials! With welcoming colors, shapes that convey openness and availability, and photographs of our nonprofit members, NIA’s amicable brand of design doesn’t aim for corporate formality. Instead, it strives for approachability and clarity.

Dottie Lechtenberg, NIA’s in-house graphic designer who has worked with NIA for 24 years, discusses her approach.

What’s your creative process for producing designs that are representative of NIA and its members?

It helps to place yourself in our members’ shoes. We’re a nonprofit ourselves—so we don’t have to imagine being one. We are our members, at the very core. As we like to say, we’re nonprofits’ own insurance company. When I’m creating a design, I think, As a nonprofit, what do I want from my insurance carrier? I want an insurance provider that is ready to deliver what my nonprofit needs, has proven itself trustworthy over the test of time, and truly cares about protecting my nonprofit. It’s not too much to ask. That’s what insurance should be, and that’s what we are.

We want to provide our members with more than excellent insurance. We also want to support the important programs, events, and projects our members undertake every day. That’s why we help our members run their operations smoothly with our risk management expertise and business management resources. I really enjoy my role of presenting these resources in a visually friendly and accessible way.

How do you make information visually compelling for your audience?

I start by thinking about the needs of the audience. For example, if I’m working on an ad for a magazine, I’ll first identify whether the reader is a nonprofit or an insurance broker; both are our customers. You have to think about the purpose of the publication before the purpose of the ad.

When nonprofits are the audience, we want to make sure they understand that we exist to serve them and that we understand the issues they face. For insurance brokers, we want to communicate our financial strength, our superior coverages, and our customer service, which is remarkable compared to what other carriers provide. Insurance brokers love working with us because we’re committed to nonprofit insurance and because we’re so easy to work with!

What attracts nonprofits to NIA?

When nonprofits realize that we really are a 501(c)(3) organization that exists solely to serve the nonprofit sector, we have their trust. Our primary purpose is to make sure nonprofits continue to operate and serve their communities. That’s a completely different objective than our competitors.

Because we’re such an unusual organization, it takes a while to sink in. The realization usually doesn’t dawn on a nonprofit until they have an interaction with us and discover we don’t act like any other insurance carrier out there.

You started at NIA 24 years ago as the receptionist, then as the CEO’s assistant. How did you discover your passion for graphic design?

I’ve always enjoyed artistic hobbies, but I had not pursued them professionally until NIA recognized my talent and supported my desire to take on creative projects and develop my skills.

When I was at the front desk, I started designing a newsletter for our company. I used to actually walk those newsletters to the post office before we switched to emailing them! I also had the opportunity to design the educational booklets that we provide to our members for free. Then I designed our annual report and informative brochures among other things. NIA really is a nurturing and stimulating environment for learning and growth.

Our marketing efforts have evolved over time. We didn’t have an actual marketing department back then, so we hired contractors, but as the company grew, we brought those projects in-house.

In that transition from outside contractors to your in-house graphic design work, did you see a difference in how the message was conveyed?

Tell us about the NIA logo.

Our founder and CEO (an artist herself in her spare time) literally sketched our logo on a piece of paper and handed the rest to me. The four outside shapes represent the companies in our cooperative. In the middle is a heart, signifying our commitment to nonprofits.

Our first company NIAC (Nonprofits Insurance Alliance of California), the original founding component, is represented at the bottom rectangle in blue.

Then, ANI (Alliance of Nonprofits for Insurance), represented in green, grew out of NIAC and extended our reach.

The purple shape on the right represents the backing of NANI (National Alliance of Nonprofits for Insurance), a captive reinsurer that is part of our group.

Finally, there’s AMS (Alliance Member Services)—the management company that employs our staff, in red, next to the heart that represents the nonprofit sector.

The logo is a great reminder to our members, brokers, and our staff at this unique cooperative that a heart for nonprofits makes us who we are!

Dottie Lechtenberg is the Creative Specialist at Nonprofits Insurance Alliance. Originally from Nashville, Tennessee, she has lived on the Central Coast of California for 30 years. In her spare time, she enjoys being with friends and family, volunteering at a variety of nonprofit organizations, making crafts like cards and mosaics, and gardening.

When NIA formed 30 years ago, we were the first multi-line nonprofit risk pool offering coverages by nonprofits, for nonprofits. NIA was an unusual cooperative for many reasons, but the most defining feature was its awareness, knowledge, and assessment of nonprofits to offer innovative coverages designed specifically for the sector. Steve Moody, who has worked with NIA for 27 years, discusses how NIA determines what coverages to offer nonprofits.

You worked for a for-profit insurance carrier prior to working for NIA. Did you notice any stark differences in attitudes toward customers between your previous workplace and this nonprofit?

A huge difference. The mission of that P&C (Property & Casualty) insurance company was completely different in underwriting philosophy from NIA. The name of the game was to get as much premium as you could with very little emphasis on customer satisfaction. At NIA, that’s not how we think. We’re more about fairness toward our members and all parties involved, and we’re interested in building long-term relationships with our members. That resonated with me.

And did you notice any difference in the policies offered?

Absolutely. NIA is a nonprofit, and our policies are geared toward our specific market, the 501(c)(3) nonprofit sector.

One difference we introduced early on was a $10,000 reimbursement to the nonprofit employer for an employee placed on leave during an improper sexual conduct or physical abuse investigation. Nobody does that. We didn’t charge additional premium for this added coverage.

We provide the reimbursement so that the nonprofit can then place the accused employee on leave during the investigation and have another staff person take on the accused employee’s duties without incurring additional payroll expenses. This way, all parties are protected, and the nonprofit can continue to function in the meantime. When any of our members hear that we offer this as part of our coverage, they immediately understand and appreciate why.

How do you decide what exactly nonprofits need and what specifically to add or remove on a coverage form to respond to those needs?

Our underwriters will get feedback from their brokers about our coverage forms. Or, underwriters may get feedback from the nonprofits themselves. Once in a while, we learn that a nonprofit needed a coverage we didn’t offer. We have a standing committee to evaluate that new coverage and see whether we ought to provide it.

Most of our coverage form changes stem from feedback from members and brokers. The second way coverage forms can change is if we handle a claim and then learn during the claim handling process that there is a gap in coverage. We’ll amend the coverage form to close that gap if we think it makes sense.

An example is the product we created because of claims at group homes. Let’s say a client of the group home intentionally damages the personal auto of an employee or volunteer. That sort of claim would then become the responsibility of the employee/volunteer and not the insurance company or the group home. We created a product so we can pay for that type of damage. We scored lots of kudos from our members who sometimes deal with difficult clients!

Does NIA have a process for defining its position on policies to respond to a changing landscape?

It’s very much a collaborative approach. We talk about the issue and we try to come up with a solution that meets the needs of the nonprofit sector. We’re careful not to introduce anything that’s too broad or too restrictive. We want to provide sustainable coverage that nonprofits can depend on year after year.

We have around 900 active coverage forms and endorsements tailored specifically to nonprofits. Keeping those organized is quite a task. We spend a lot of time managing those forms—constantly moving, changing, improving them—retiring forms and introducing new ones to account for new laws, rules, or statutes in the various states.

Other than requesting coverages, what do brokers usually contact NIA about?

We always invite brokers to ask questions. A lot of brokers don’t really know what Directors & Officers (D&O) coverage is. They may not be experts on Improper Sexual Conduct and Physical Abuse coverage. Most brokers don’t know where Employment Practices Liability is addressed in the coverage. You have to know where to look! It’s under the definition of wrongful act in the D&O form.

Brokers who aren’t familiar with these coverages are usually the ones who are not familiar with nonprofits. We try to help them as much as possible. These coverages come into the spotlight because of the nature of how nonprofits work. Every single nonprofit must have a board, for example, whereas if it’s just a business—say a restaurant an individual owns—there doesn’t have to be a board.

Our D&O is also different from what most insurance carriers offer. It has features that are beneficial to the member. For example, we provide up to $250,000 in defense assistance for wage and hour claims. Other carriers don’t do that. So, our policy doesn’t cover unpaid wages, but we’ll assist the nonprofit if there is an investigation surrounding a wage or hour violation. We spend money on that. That’s a big difference, and our members greatly appreciate it.

Steve Moody is the Compliance Director at Nonprofits Insurance Alliance. He has worked in the insurance industry for over 30 years.

Steve is one of the founders of The Bay School, a nonprofit school in Santa Cruz for autistic children and one of NIA’s insured members. He has also served on the boards of two additional NIA members, as president for Dientes Community Dental Care and as former Secretary for the Santa Cruz Breakers.

Steve has two children, one wife, one cat, one dog, one tractor, and three bicycles.